Vodafone sees German TV base fall but recovers ground in Spain

Vodafone saw its overall TV base decline by 245,000 in the year to March, which the company said primarily reflected the loss of lower ARPU basic subscribers in its German Kabel Deutschland footprint, as well as some customers of the former Unitymedia.

Despite the losses over the full year, Vodafone added 41,000 TV customers in the fourth quarter in its other main TV market Spain, where it had previously seen significant losses due to the absence of football from its line-up.

The operator said the gains in Spain were driven by its new movies and series offerings.

Vodafone’s other TV markets saw modest rises in numbers. In Portugal, its based grew from 664,000 to 679,000 in the fourth quarter, while in Italy its TV base grew from 208,000 to 235,000 over the same period. In its other European markets, TV numbers grew from 2.291 million to 2.387 million. Overall, the operator had 18.283 million TV customers at the end of March.

Despite the fall in TV numbers, Vodafone added 381,000 net cable customers in Germany across the year, including its Unitymedia footprint, with 110,000 customers being migrated from DSL. The operator added 216,000 broadband customers and achieved growth in its converged offering, GigaKombi, with 259,000 converged customers being added across the year, taking its total converged consumer base to 1.5 million.

In Germany, overall service revenue was flat, with retail growth being offset by declining wholesale revenue and the regulation of roaming charges. Mobile revenue declined, driven down by lower wholesale sales despite growth in contract customers.

In Spain, the operator’s broadband base was flat in Q4 while its mobile contract base grew by 51,000.

In Spain, service revenue declined, which the company said was down to price competition as well as its decision not to renew football rights. The company took an impairment change of €0.8 billion on its Spanish operation in the expectation of lower cashflow due to the economic situation.

Overall, Vodafone’s group revenue for the full year to March increased by 3% to €45 billion, while adjusted EBITDA grew by 2.6% to €14.9 billion.

Commenting on the results, Dan Ridsdale, Global Head of TMT, Edison Investment Research said: “Solid results from Vodafone, with organic growth firm at 0.8% and EBITDA increasing by 2.6% to £37.9 million supported by cost reduction measures. Net debt increased 56% to €42.2bn, or 2.8 times EBITDA, on the back of Vodafone’s purchase of Liberty Global assets in Germany and Eastern Europe, but given the resilience of the model, not a worrying figure.”

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